During a statement made at the Sulphur West Cal Chamber of Commerce, Louisiana Gaming Control Board’s chairman Ronnie Johns revealed a series of information regarding the powerful impact of gambling on the state economy. Among other things, he spoke about the way the gambling industry is currently bringing in more money to the state’s treasury compared to any other type of private industry.
Gas and Oil, No Longer the “King Daddy of State Revenue”
Johns explained that the gas and oil industries that used to be considered the absolute kings of the state budget for many decades in a row have finally found an important “adversary”: the gambling industry. In the past, whenever the price of oil was increased by $1 per barrel in, the Louisiana state budget would cash in an additional million dollars. At the moment, gas and oil attract less than $600 million to the state treasury every year. As compared to the billion dollars that the gaming industry including lottery brings in yearly, the figure falls far behind. Between $160 and $170 million in lottery money is allocated to educational projects each year. At the same time, at the time when the Lake Charles casinos were built for a total investment valued at $1.9 billion, the respective businesses were not eligible for an industrial tax exemption, tax credits for quality jobs, or enterprise zone credits. Caesar’s Horseshoe Casino in Westlake is another important investment valued at $200 million that is currently underway.
Financially Sustainable: Zero Tax Breaks, Attracts Top Talent
According to the same statement made by Johns, the general view on the gaming industry is constantly changing. While a mob might have put Las Vegas on the world gaming map, the industry is now ruled by prestigious MBAs with diplomas from Harvard, Notre Dame, and Wharton.
Johns also spoke about how the gaming industry, as opposed to other industries, does not get any tax breaks. The chair gaming Control Board’s argued that international chemicals and energy company Sasol obtained $115 million in tax incentives for a project valued at $15 billion. Nonetheless, when the two Lake Charles casinos were built for a combined investment of about $1.9 billion, they were not found eligible for similar tax exemptions, enterprise zone credits, or quality jobs tax credits. At the same time, Johns also used a similar example of Caesar’s Horseshoe Casino which is still under construction in Westlake. The total investment is evaluated at $200 million.
As for the number of workplaces generated by the industry, there are over 26,000 direct employees in the state. The local governments in Louisiana are responsible for how the percentages of direct employees are being distributed.
The Wind of Change Taking Over Louisiana Parishes
All forms of gambling in the state were subject to thorough voting procedures in all parishes. Many of them expressed their votes against video poker, while a total of nine out of all 64 parishes disagreed with sports betting being introduced into the community. Old Evangeline Downs voted NO on casinos and YES to sports betting venues, while Lafayette Parish expressed its disagreement in regards to all forms of gaming.
Money is also rolling nicely from most of Louisiana’s casinos that currently pay between 27 and 28 percent to the state treasury once all local taxes are added to the final numbers. Johns used the example of the Golden Nugget and L’Auberge Lake Charles that currently lease property from the Port of Lake Charles and send money right back into the local entity.
Seventy-five percent of video poker revenue reaches the state’s pockets, with the rest going back to the local government it initially derived from. Ten percent of all sports betting revenue goes back to local governments in the 55 parishes that supported the activity. For example, of the $65 million in taxes paid by Harrah’s Casino, $178,000 reaches the state on a regular, daily basis.
So far, sports betting aficionados in Louisiana spent a total of over $1.4 billion on sports bets. In July alone, the state managed to generate a revenue of $16.5 million. Out of the 20 available licenses, regulatory bodies awarded 17 of them. A new license will soon be handed over to the Horseshoe Casino once it will open its gates to the general public by the end of the year in Westlake. The casino will cover a license fee set at $750,000 which is nonrefundable
The Lake Charles market counts two casinos at the moment. Nonetheless, it manages to attract $15 million extra in revenue with the help of two licenses compared to the five total licenses found in the Shreveport-Bossier Market.
Educational Programs for Children Sponsored by Sports Betting Revenue
A series of early childhood education programs and initiatives will be granted 25 percent of the total revenue derived from sports betting in the state. This means that those parishes that did not want to open the gates to sports betting in their communities will continue to be geo-fenced and blocked from participating in state revenue that is derived from the respective program. On the opposite end, certain cities like Lake Charles are part of special pools belonging to local municipal governments that are known to allocate tax revenue from gaming tax among various agencies. In this case, the list includes McNeese State University, Calcasieu School Board, and Sowela Technical Institute.
All in all, like the case of other US states that decided to embrace gaming in one or several forms, the effects on the local communities and overall economy are meeting and oftentimes exceeding all expectations.